The Seniority Pay Cut

Submitted by Scott Jaschik on April 9, 2008 - 4:00am

To get a good raise, do you need to quit?

That may well be the case at many colleges that are suffering from salary compression and salary inversion -- situations where those hired most recently are paid disproportionately more or flat out more than those with more experience. The issue is attracting the attention not only of faculty leaders, but of college administrators, who fear that these salary gaps discourage talented faculty members from staying at an institution.

On Tuesday, at the annual meeting of the National Center for the Study of Collective Bargaining in Higher Education and the Professions, some college officials and experts shared their takes on the issue, and strategies for eliminating these “anomalies” in what people are paid.

The most striking example was offered by Mark Preble, assistant vice chancellor for human resources at the University of Massachusetts at Boston. He did an analysis last year of the salaries of all assistant professors. He found that those hired in 2007 – who hadn’t been there long enough to have received raises -- earned more on average than those hired in 2002, 2003, 2004, 2005 or 2006. The starting salary has gone up by so much, he said, that those not on the market are effectively punished for not moving. Indeed those hired that year were earning about $10,000 more a year than those hired five years before.

“It pays to quit,” he said.

Preble said that when he was preparing his talk, he expected everyone to be shocked by his figures, but that when he chatted with others at the conference, he found that many had noticed the same trend -- and that was the impression of many at the session. He said that there are degrees of salary compression across the board, but that it is most prevalent in departments where market demands force higher than normal salaries for professors -- fields in the sciences and business, at his institution.

The faculty contract at UMass Boston gives the most leeway on salaries at the point of initial hire -- or when someone has an offer from another institution. While there are regular and merit raises for continuing faculty members, they quickly fall behind new hires in departments where the starting salaries are going up at a sharp rate.

Preble discussed several tests that colleges may consider using to determine whether they have a salary compression problem, as well as policies that could prevent one. For example, a college may look at the average salary for a department’s assistant professors, and consider whether it wants to set some sort of maximum for new hires of 105 percent of that average, or to consider salary minimums based on years of experience, such as that someone with four years of experience as an assistant professor shouldn’t be earning less than 95 percent of the average. In doing such calculations, Preble said a college might want to remove the portion of salary based on merit raises, so that only base salary -- which theoretically should be more equal -- is compared.

In the last two faculty contracts, UMass Boston has set up two processes for dealing with salary compression. The first allowed people who believed their salaries were unfairly low compared to recent hires to apply to a faculty committee, which reviewed their requests and made recommendations to the provost, who eventually awarded 58 faculty members adjustments, ranging from $685 to $7,500. In the new contract, the committee is a joint faculty-administrative committee and it has final say over awards -- no appeals are possible. However, unlike the first process, where there was a finite sum of $150,000 to be used, the new committee is authorized to award raises as appropriate. In addition, the new process will involve an across-the-board review of salaries, so people will not be expected to apply for adjustments.

While it will cost money to provide these raises, Preble said that it makes sense financially. “Turnover is very expensive,” he said. “We use to put every bit of new money into hiring new faculty, but now we are looking at retaining faculty, even if it means fewer [new] slots.”

Saranna Thornton, a professor of economics at Hampden-Sydney College and chair of the American Association of University Professors' Committee on the Economic Status of the Profession, said that she believes colleges underestimate the costs associated with faculty turnover. Many colleges think of the costs of a search in terms of advertising, sending a few professors to an academic conference to interview semifinalists, and bringing a few finalists to campus for interviews. If colleges factored in the time of those involved (based on their salaries), the time and costs associated with setting someone up in a department, and the lost momentum of someone who was doing well leaving, they would add up to much more.

Margaret Merryfield, senior director of academic human resources for the California State University System, said that salary compression was a problem in her system as well. The current faculty contract has created a process to review possible inequities and to award base raises to those found behind disciplinary norms for their faculty rank. She said that just over half of assistant professors will end up receiving such an adjustment, with most of these raises going to those hired prior to the fall of 2005.

The process Cal State now has in place wasn’t easy to set up, Merryfield said. But she argued that it was much better than the system before these issues were discussed, when the way of dealing with salary compression was for deans to periodically give extra money to the “squeaky wheel” -- while not necessarily having a way to evaluate complaints about possible inequities.

In her presentation, Thornton of the AAUP noted that there are many other inequities in faculty salaries. For instance, the AAUP has found growing gaps between faculty pay in the humanities and in the sciences and some other fields. She noted that these gaps are bad for morale and raise fundamental questions about fairness as they don’t reflect hours worked or difficulty of work.

But when Merryfield and Preble were asked, they made clear that their plans were focused on inequities within departments, not among them.